CEOs with a functional background in operations: reviewing their performance and prevalence in the top post

Koyuncu, Burak; Firfiray, Shainaz; Claes, Björn and Hamori, Monika (2010). CEOs with a functional background in operations: reviewing their performance and prevalence in the top post. Human Resource Management Journal, 49(5) pp. 869–882.

DOI: https://doi.org/10.1002/hrm.20389

Abstract

With this study, we update research by Ocasio and Kim (1999) by testing whether the trends that favored the prevalence of CEOs with an operations background in the 1980s and early 1990s continued between 1992 and 2005. Given that supply chain management became a top business priority during this period, we expect a greater prevalence of CEOs with an operations background. This is because, traditionally, executives belonging to the operations function have assumed responsibility for supply chain management issues. Our results, based on a sample of 437 CEOs who lead large-sized U.S. firms in eight industries, provide partial support for the hypothesis that CEOs with a functional background in operations attain higher post-succession performance than CEOs with other functional backgrounds. In addition, we find that the likelihood that newly appointed CEOs have a background in operations is greater in succession events that have taken place more recently and in situations that occurred in the face of poor firm financial performance.

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